LPN Development Set Bt10 Billion for Land & New Development in Bangkok Chon Buri, Pattaya, Hua Hin

LPN Development Set Bt10 Billion for Land & New Development in Bangkok Chon Buri, Pattaya, Hua Hin

LPN Development has set aside Bt10 billion for land purchases and the development of 13 condominium projects in Bangkok and other provinces.

The new projects are expected to drive sales by Bt20 billion overall and revenue to Bt15 billion this year, up 15 per cent from the revenue estimate of Bt13 billion for last year, managing director Opas Sripayak told a news conference yesterday.

LPN Development Group has launched a condominium project called Lumpini Park Beach in Jomtien in the same area as Cetus and Reflection. The project has a market value of about 4 Billion Baht, & three 30-storey towers.

A total of Bt6 billion of the investment budget will be spent on developing |infrastructure and condominium projects due to be completed this year and others set for launch during the year, and the remaining Bt4 billion on buying land to develop projects both this year and next.

Half of the Bt10 billion will come from cash flow, and the rest in the form of project lending by the company's bank. This will maintain LPN's debt-to-equity ratio at no more than 1:1, he said.

The company already has sufficient land for the development of eight new projects this year, having spent Bt2 billion last year for this purpose. A total of Bt4 billion will be for buying five plots for the development of condominium projects during the course of the year, and another Bt2 billion for new plots for development in 2014.

"We are continuing to expand our investment, having seen demand for condominiums priced at not more than Bt3 million per unit continuing to grow," he added.

According to LPN's research and development department, some 60 per cent of the 105,833 overall new housing units launched in 2012 were in condominium projects, compared with about 50 per cent in the previous 12 months.

The research also found that 76 per cent of condominiums launched last year offered units costing no more than Bt3 million.

LPN had a market share of about 15 per cent of the 63,500 units in 141 new condo projects launched last year.

The company believes more than 60,000 condo units will come on to the market this year, but for Bangkok the bulk will likely appear in the second half as property developers will first wait and see the impact of the new city plan, which comes into effect in May.

"We will launch new projects in the provinces in the first half of the year and, when the new city plan is final and effective, we will start to launch projects in Bangkok during the second half," Opas said.

Four new provincial destinations for LPN's condominium projects are Chon Buri, Pattaya, Hua Hin and the Northeast, possibly in Udon Thani.

"We are studying investment in Udon Thani because it is the gateway for both local and foreign interests to expand their investments in Vientiane," he added.

The company already has land for three of the projects, at Sukhumvit Soi 62, Srinakarin Road and Chalermprakiat Road. It is negotiating the purchase of plots for the other two.

Pornsanti managing director Somsri Taechakaisri said the company was targeting revenue of Bt1 billion this year thanks to the five new projects, against overall income of Bt670 million last year.

"We decided to expand our investment in low-rise housing because we saw strong demand after launching two townhouse projects worth Bt700 million last year, which were sold out and are generating income both last year and this," she said.

The subsidiary also targets generating at least 10 per cent of LPN's total revenue by 2015, she added.

LPN posted revenue of Bt6.4 billion and a net profit of Bt984 million in the first nine months of last year. It also transferred condo units worth Bt6.5 billion in the final quarter that will be booked as revenue for the full year.

LPN has a backlog worth Bt18 billion, Bt12.5 billion of which will be transferred to customers this year, and the remainder in 2014.